Tourism Sector Opens up Investment Opportunities

The Indonesian government’s efforts to increase investment can be realized through a variety of policies that are not just reserved for upstream and downstream industries. Investors are also sensing new opportunities in the tourism sector. In the view of the government, Indonesia’s geography and outstanding resources for tourism should not be put to waste, and instead, to be used to increase investment in Indonesia.

Through investment opportunities in the tourism sector, Indonesia has the chance to improve their medium-term revenue. At least that was said by the Practicing Manager of World Bank’s Macroeconomic and Fiscal Management in South East Asia-Pacific region, Ndiame Diop. According to Diop, Indonesia’s tourism sector is still wide open to foreign investment. However, keeping in mind that infrastructure needs to be better prepared to support the growth of investment in this particular sector.

During the two years of the administration of President Joko Widodo, there has been an increase in the investment in the tourism sector. According to Minister of Tourism, Mr. Arief Yahya, Indonesian investment in tourism has reached US$ 850 billion. This incredible number has been achieved partly because President Joko Widodo provided subsidies for infrastructure, health and education. Automatically, it improved the image and credibility of the government in the investment climate.

The increased investment in the tourism sector can be considered to be quite significant, reaching 70% compared to the previous year. Minister of Tourism, Mr. Arief Yahya also stated that it projected the investment in the tourism industry will rise to US$ 1.5 billion by the end of the year. Just imagine how this positivity will impact the national economy. When viewed from the calculation of the World Travel and Tourism Council, any travel destination in Indonesia worth US$ 1 million, it will have at least 200 jobs available in the country.

The government’s attention to increase investment in the tourism sector is not without reason. The global economic downturn played an impact of the decline of Indonesia’s purchasing power giving a negative effect on the investment world. This prompted the need for the government to open up new investment opportunities in the country and abroad in industries that have the potential despite being in the midst of the global economic downturn. The Ministry of Tourism itself targets to attract investment in the tourism industry valued at US$ 10 billion to develop ten tourist destinations in the coming year of 2019. This plan certainly cannot be achieved alone; therefore there must be cooperation with private sectors.

In relation to the optimism of the Ministry of Tourism related to the year-end achievement of the Indonesian investment in the tourism sector, Bank Indonesia’s survey showed that Indonesian businesses in various sectors of tourism in Bali are more likely to wait before increasing capital investment in the third quarter of this year. As during the months of July to September is not holiday seasons, therefore many supporting businesses such as retail, hotel and restaurants run their operation cautiously to not make any loss.

This makes investment in the tourism sector decline during that period. However, during the fourth quarter later, some businesses are already planning to increase their investment. They will invest during the fourth quarter of the year from October to December, which is peak holiday season that usually brings in more tourists and profit for the tourism industry.